Who controls wealth?

The country’s economic situation is deteriorating rapidly, and the only solution we hear is to go to either the IMF or friendly countries for money.

This situation has been in the making for decades, and it became more acute due to the Covid-19 pandemic and the current geopolitical situation. But Pakistan was on a shaky ground much before that. The focus of the government, the media and most economists is on the present, but no one is offering a long-term solution.

The economy, in its essence, is a system of producing and distributing wealth, and this is closely intertwined with the political system. Its overarching goal should be the wellbeing of people, ensuring equal access to resources and opportunities for all citizens regardless of race, religion, ethnicity, language, gender, etc.

If we want a more egalitarian society and desire to become a self-reliant, debt-free nation, we have to bring a paradigm shift in our thinking and approach – one that involves reorganizing the economy and politics. Some difficult questions have to be asked, no matter how disruptive to the current order they may be.

The fundamental question is who is controlling all means of generating wealth – or means of production – in Pakistan and who makes decisions on how this wealth is distributed? In our country’s context, the most important means of production is land.

Pakistan is nothing but a piece of land which is home to some 230 million people. Land is not only the source of food, but it also contains gas, oil, precious metals/stones and other natural resources. Rivers flow on it. There are lakes and underground water. We build houses, infrastructure for public use, education institutions, hospitals, parks, etc on land.

In Pakistan, not only is land up for sale but its ownership too is concentrated in a few hands. It is used for speculation, a cheap and less risky way to become rich – which may increase GDP and look good on financial statements, but it actually hurts the country and the economy in the long run. Pakistan’s colonial legacy has also imparted added power to land ownership, causing oppression and exploitation of people. If a powerful rich class is allowed to own as much land as it wants, what will happen to the rest of the people?

Then there are factories, large businesses, companies involved in imports/exports, banks, insurance companies, large media houses, even education institutions and healthcare facilities, and large transport- and construction-affiliated businesses. A small group of elite controls all these and there is monopolization and mafia-like behaviour in most sectors. This gives them the power to control political decision-making and the economy, which is a root cause of the dire situation we find ourselves in.

As long as this continues, there is no hope for long-term economic stability, industrialization, freedom from debt or ending poverty. The first step in the right direction is the abolition of the remnants of the feudal system. Abolishing feudalism will free up not just the land but the people’s potential – so crucial to progress. But it is only possible if there is a countrywide mass movement against it, as the land-owning class is quite powerful.

In urban settings, land mafias have to be dealt with. Some important questions are: should we continue to build posh luxury housing societies when housing shortage for middle- and lower-income groups is reaching critical levels? Should people be allowed to own as many houses as they can buy or more than their needs? I believe there is a need for a comprehensive land policy, taking into account food and other needs of people. Land should be treated as a strategic asset instead of a commodity to be bought and sold in the market.

The next question is the role of the state in the economy. For the past few decades, a neoliberal agenda has been imposed unchallenged by global capital through institutions like the IMF and the World Bank. The state’s role has been eliminated from economic management except for intervening on behalf of capitalists, when they get in trouble. They tell us that markets are self-regulating, their actions are in the best interests of consumers, state regulations are bad for the economy as well as society, the state has no business in running businesses or providing services to the public, and all state-owned enterprises should be privatized, etc. But in practice, this has been proven deadly for the poor, especially in poor countries.

The lessons from other developing countries are that without state intervention, countries cannot achieve their goals. Even in developed countries, the state adopted this strategy in the initial stages of development. So, in Pakistan, the state will have to play an active role and control the commanding heights of the economy – areas which are strategic to the country’s survival, security and progress. Some of these areas are heavy industry, energy sector, natural resources, education, healthcare, housing and transport.

Without industrialization, Pakistan has no future. But this will not happen without the state’s active intervention. The state will have to take control, guide, facilitate, regulate and monitor. It cannot be left to the private sector, which in Pakistan is used to living on state subsidies and maintaining a privileged status. It has neither the capacity nor the will to set up what is needed. The sole purpose of private investors is to make profit, not to provide service to people or think about the country’s progress.

The other areas crucial for economic strength in the long run are human development – especially of the youth – role of women in the economy, and population control. Economic experts and politicians who share their thoughts in the media give the impression that the economy is just numbers, GDP, dollar price, foreign reserves, exports, imports, etc. Hardly anyone talks about what needs to be done behind the scenes for sustainable economic growth.

Human development, with a special focus on young people, is the single most important factor to put Pakistan on the road to economic self-sufficiency. This translates into creating a world-class education system, which promotes not only technical skills but also soft skills like critical thinking, innovation, problem solving, tolerance, open-mindedness, and debate and discussion to resolve differences. This has not happened up till now because the empowered educated youth is a potential threat to the hegemony of the ruling class on economy and politics.

No nation can progress by keeping women out of mainstream economics. This culture of a single male breadwinner has to be eliminated. The state has to ensure equal access to quality education and jobs for women. Those who want to start a business should be trained, facilitated, and given access to finance. Safe, comfortable and reliable transport is important. Implementation of laws against harassment at the workplace are also necessary.

Another critical problem to address is uneven development. Pakistan is not just a few large cities. The development gap between rural and urban and regions and provinces has to be minimized. It not only causes stress on cities but also creates social unrest which is then exploited politically and has become a security threat.

And, lastly, if nothing is done to slow down the rate of population growth, Pakistan will crumble under the weight of its own people. Population growth has outpaced economic growth. This is unsustainable. The state has to start a public education campaign to address this issue.

If we take care of the fundamentals and follow our goal of setting up an egalitarian system, the rest of economic indicators will take care of themselves.

The writer is the vice chairperson of Barabri Party Pakistan. She can be reached at: shahnazK@gmail.com